Duckhorn Portfolio, a public Napa Valley wine firm recognized for placing California merlot on the map, has struck a deal to purchase chardonnay producer Sonoma-Cutrer Vineyards for about $400 million.
The inventory and money deal will increase Duckhorn’s
potential gross sales functionality, whereas boosting its profile inside chardonnay. Sonoma-Cutrer’s six Russian River Valley and Sonoma Coast property vineyards will probably be folded into Duckhorn’s umbrella of luxurious wines, priced above $15 a bottle.
Brown-Forman, which purchased Sonoma-Cutrer in 1999, is about to obtain 31.5 million shares of firm inventory, valued at roughly $350 million, underneath the deal. It additionally will get a 21.5% estimated possession stake, plus about $50 million in money. The money portion can be financed utilizing Duckhorn’s revolving credit score facility.
“The Duckhorn Portfolio has some of the world’s most-respected luxury wine brands and Brown-Forman looks forward to participating in their future growth through a minority equity stake and board membership,” stated Lawson Whiting, president and CEO of Brown-Forman, in a press release.
Shares of Duckhorn slipped Thursday, and are down about 35% yr so far. In a uncommon transfer for a U.S. vineyard, Duckhorn went public in 2021.
Acquisitions have been a key a part of Duckhorn’s technique to increase its footprint of U.S. luxurious wines on the West Coast, in addition to fortifying its wine manufacturing capabilities towards wildfires and local weather change.
See: Duckhorn CEO on how the pure-play, exchange-listed wine maker will develop, and adapt to local weather change
Duckhorn Portfolios, which incorporates Decoy, Paraduxx, Canvasback and different duck-themed labels, already consists of 10 wineries stretching from Washington state’s Walla Walla area to California’s Central Coast.
Duckhorn reported $100 million in internet gross sales throughout a fiscal-year 2023 earnings name in September, up 28.3% from a yr earlier than. Sonoma-Cutrer stated it had about $84 million of annual internet gross sales as of July 31. The deal is anticipated to shut within the third quarter of Duckhorn’s fiscal yr 2024.
Source web site: www.marketwatch.com